Californians say economy doing better but middle class shrinking

150 150 John Guenther

Californians are feeling a little better about the economy. (Photo Credit: Atlantic Community/Flickr)

Along with sunnier weather arriving, Californians think the economy is also looking a little brighter but they also say there’s a lot the state could be doing better and, more worrisome, that the middle class is shrinking here.

That’s what most people across almost all demographics said in the latest survey by the California Business Roundtable and Pepperdine University, in a series asking Californians about the state of the state and its economy.

The California economy had a turnaround, at least in terms of perception in the poll. When asked if the state’s economy was getting better, worse or the same, more people chose “Better” at 39.4 percent, up 9 percentage points. That was a flip from last month when more people picked “Worse” than “Better.”

Those results are mirroring the national story, which showed a rise in consumer confidence, causing a surge in stocks yesterday.

“[The survey] was conducted last week, so I expect rising stock market news is a big factor,” said Dr. Michael Shires of the Pepperdine University School of Public Policy. “In addition, there has been a cluster of stories around information and Silicon Valley are doing well and even optimism in Europe.”

Jobs and the economy stood tall again in the survey as the number one issue by far with those surveyed and 35.6 percent picking it as the top priority for the state. This sentiment was consistent across all demographics, said Jeff Harrelson of Mfour Research which fielded the poll.

“What this tells me is Californians’ priorities remain pretty rock solid with a need to focus on jobs and economy,” said Harrelson.

Yet, clearly there’s work to be done. When comparing the state economy with the national economy, the number of people polled who said California was doing better improved, but more voters still said the state was doing worse than the overall U.S. economy, at 38.8 percent.

The state Legislature maintained an overall negative perception in the eyes of voters, including their management of the state’s business climate. Mirroring the national perception of doing business in California, the people surveyed handed out lower grades to the Legislature than the previous month’s tally.

When it comes to encouraging small businesses, 84.8 percent of voters gave the Legislature a “C” grade or lower. And 92.1 percent also gave legislators a “C” or lower when asked if they were doing enough “limiting or eliminating unnecessary regulatory red tape.”

“There is a clear sense in the media, in business and in the public that the state should do much better in these areas,” said Shires. “They have deep concerns about the ability of their leaders to address these problems and these grades reflect it.”

Another troubling result is the number of people who believe the middle class is shrinking in California. That represented a whopping 74.7 percent of those polled.

Harrelson highlighted the fact there was widespread agreement on the middle class question among Democrats, Republicans and others.

“We think it’s a critical issue because it really represents an underlying agreement among the state voters that California’s policies may be undermining one of the core tenants that’s made the state so successful in the past,” said Harrelson.

These results highlight the need for California to create a statewide economic strategy–which it doesn’t currently have–that makes creating more middle-class jobs a priority.

That’s why one of the main goals of the California Economic Summit is to do just that and to make sure the state has policies in place to help businesses get capital to grow and also do what they do best in California, start up and innovate.

Another thing to remember when reading polls like these is that this optimism is mostly likely greater in some regions over others. The state has been experiencing an uneven recovery with the tech boom being felt in the Bay Area but not as much in Southern California.

While the economy getting good press helps Californians’ perception of how things are going, ultimately, promoting smart policies and having the right conversations to boost all regions of the state will affect how brightly the economy burns over the long term.


John Guenther

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